Greco now needs to wrestle with Generali's shares

MILAN (Reuters) - Mario Greco's new offices at Generali's pink stone headquarters on the Trieste waterfront are a picture postcard of respectable tranquility, but appearances are deceiving: internal warfare has felled two chairman since 2010.

While Generali's worst days of management turmoil are seemingly behind it now, Greco will have his work cut out for him. The top job at Generali is doubly challenging: the new chief executive will face the task of boosting the insurer's sagging share price as well as navigating the corridors of a provincial company so conservative that it didn't create an investor relations department until 1998.

"Greco is certainly capable of taking Generali in the right direction," said a top executive at one of Italy's biggest banks.

Greco, 52, has spent the last five years at Swiss-based insurer Zurich Insurance Group , gaining international experience while spending time away from the squabbling of Italy's tightly-knit financial circle.

He is an expert navigator of complex boards, said a person who has worked with him in the past, with a sharp mind and a keen instinct for self-preservation.

At Generali, Greco has space to cut costs if he streamlines the group's fragmented asset management operations as well as completes its integration with INA.

"There is a lot of room for improvement at the industrial level," said the bank executive.

STAMINA REQUIRED

A Naples native and a passionate cyclist who still finds time to take on the steep roads around Italy's Dolomites mountains, he will have to call on all his mental and physical stamina to lead Generali out of insidious euro zone waters.

He will also need to show sufficient independence from Mediobanca , the investment bank which is the insurer's main shareholder and has often exerted disproportionate influence in the past.

"Mediobanca is facing some difficulties. Generali is a key source of revenues. They want a freer hand at Generali," said a person with knowledge of the matter.

Greco belongs to Italy's generation of 50-something financial executives who brought market-friendly management methods to Italian finance in the 1990s.

Like former UniCredit Chief Executive Alessandro Profumo and former Intesa Sanpaolo CEO Corrado Passera -- now Italy's Industry Minister -- Greco earned a business degree and then started his career at McKinsey.

When he took the helm of insurer RAS, now part of Germany's Allianz, in 1995, Italy's second-largest insurance group was mainly a property and casualty insurer.

Realizing that Italy's vast pool of savings was underexploited, Greco moved aggressively into life insurance and asset management, hiring thousands of new agents to wean risk-adverse Italian families away from high-yielding treasury bonds and into new financial instruments.

Under Greco's leadership, RAS poached market share in life insurance from rivals Generali and Banca Fideuram, and by 2003 had beaten its own premiums target. It had enough cash to carry out popular moves like a massive share buyback and a hefty boost in dividend payout.

One person who knows Greco well says that, thanks to his personal touch and openness, he had won the support of employees.

"He had always a smile and a few words for everyone. When he left, even the doormen were sad," the person said.